Alio Gold (NYSE: ALO) and Agnico Eagle Mines Limited (NYSE:AEM) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Profitability

This table compares Alio Gold and Agnico Eagle Mines Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alio Gold N/A N/A N/A
Agnico Eagle Mines Limited 11.32% 5.38% 3.40%

Earnings & Valuation

This table compares Alio Gold and Agnico Eagle Mines Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alio Gold $127.57 million 1.10 $46.66 million N/A N/A
Agnico Eagle Mines Limited $2.21 billion 4.78 $932.83 million $1.09 41.90

Agnico Eagle Mines Limited has higher revenue and earnings than Alio Gold.

Dividends

Agnico Eagle Mines Limited pays an annual dividend of $0.40 per share and has a dividend yield of 0.9%. Alio Gold does not pay a dividend. Agnico Eagle Mines Limited pays out 36.7% of its earnings in the form of a dividend. Alio Gold has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for Alio Gold and Agnico Eagle Mines Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alio Gold 0 1 0 0 2.00
Agnico Eagle Mines Limited 1 3 6 0 2.50

Agnico Eagle Mines Limited has a consensus price target of $55.36, suggesting a potential upside of 21.21%. Given Agnico Eagle Mines Limited’s stronger consensus rating and higher probable upside, analysts clearly believe Agnico Eagle Mines Limited is more favorable than Alio Gold.

Institutional and Insider Ownership

60.3% of Agnico Eagle Mines Limited shares are owned by institutional investors. 0.5% of Agnico Eagle Mines Limited shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Agnico Eagle Mines Limited beats Alio Gold on 13 of the 15 factors compared between the two stocks.

About Alio Gold

Alio Gold Inc, formerly Timmins Gold Corp, is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de C.V. and Molimentales del Noroeste, S.A. de C.V. (MdN). MdN owns the San Francisco Mine in Sonora, Mexico. MdN also owns the Caballo Blanco Property, an exploration and evaluation asset in Veracruz, Mexico. The Mine and the La Chicharra pit are collectively known as the Gold Property. The Company also holds the Ana Paula gold project, which is an advanced stage development project in the Guerrero Gold Belt. The Guerrero Gold Belt project consists of over two claims totaling approximately 4,200 hectares at the north-west end of the Guerrero Gold Belt, with approximately 38,000 additional hectares in the surrounding area. Ana Paula is located in the north central part of the State of Guerrero in southern Mexico, 180 kilometers from Mexico City.

About Agnico Eagle Mines Limited

Agnico Eagle Mines Limited is a gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut and exploration activities in Canada, Europe, Latin America and the United States. The Company operates through three business units. The Northern Business consists of its operations in Canada and Finland. The Company’s Canadian properties include the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine and the Meliadine project, and Canadian Malartic Mine. The operations in Finland include the Kittila mine. The Southern Business consists of its operations in Mexico. Its Pinos Altos mine includes the Creston Mascota deposit. The La India mine is owned by its indirect subsidiary. Its Exploration group focuses on the identification of new mineral reserves and mineral resources, and new development opportunities in gold producing regions. Its exploration activities are concentrated in Canada, Europe, Latin America and the United States.

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